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Consultation on the Review of Credit and Store Cards

Starting Date: 27-10-09Closing Date: 19-01-10

Background to consultation

In July 2009, the Government published the White Paper “A Better Deal for Consumers: Delivering Real Help Now and Change for the Future”. One of the commitments we made in the White Paper was to review the regulations governing consumer credit and store cards. This consultation is the first step in taking forward that commitment.

Purpose of consultation

We want to secure a better deal for consumers, giving them improved control of their credit and store card borrowing, whilst also ensuring that any intervention is proportionate, transparent and targeted. We believe that changes to the regulatory regime are likely to be necessary to achieve this. It is therefore important to hear the views of consumer groups, the credit industry and consumers in general to ensure that our approach to reform is appropriate and that we avoid any unintended consequences that could arise from the implementation of any regulatory reforms.

Areas for consultation

The consultation sets out options for change that cover four specific aspects of the way credit and store cards operate:

the allocation of payments;

minimum payments;

unsolicited credit limit increases; and

the re-pricing of existing debt.

It also identifies scope to improve the simplicity and transparency of credit and store cards more generally. Options range from taking no action to banning some of the four aspects of credit and store cards identified above.

If you are an individual consumer, in addition to any formal response to the consultation you may wish to make, you can leave comments or views on our online forum regarding the issues raised by the consultation.